Coalition will win, says US stats guru

NATE Silver, who accurately predicted the outcome of the US presidential election, tips a change of government in Australia this year.

Nate Silver

NATE Silver, the blogger and political forecaster who accurately predicted the outcome of the US presidential election in all 50 states, expects there to be a change of government in Australia this year.

However, he argues that opinion polls are only predictively significant closer to an election.

"In some ways, Barack Obama was very fortunate because the default is against the incumbent right now in a lot of different places," Silver told The Weekend Australian yesterday.

"If you had an election in the UK, I don't think the Tories would win. So to have that turnover (in Australia) is what you would expect."

In his first Australian interview after arriving in Melbourne yesterday, Silver said given the recent Australian polls, "clearly the government would be the underdog" but "the most important variable is not how many polls are taken but when the polls are taken relative to the election".

He said the "tumultuous" international economy and "sluggish growth" in many countries were making it difficult for governments to be re-elected.

"The most important variable for our model in US politics is how much time you have until the election," he said.

"We had Obama up by 2.5 points when we first launched our model in May or June last year and that only translated to a 60 per cent chance of victory because 2.5 points with six months to go is too much time for things to intervene."

Silver, 35, who writes the popular FiveThirtyEight blog for The New York Times, is visiting Australia as a guest of Crown's $20 million Aussie Millions Poker Championship.

He argues that many predictions -- from politics and sport to economics and the weather -- fail because those making the predictions do not recognise the key "signals" of truth.

"People want simple solutions to complex problems," he said. "But things are not often that certain. The world is a complex place. Thinking probablistically is the midpoint between knowledge and ignorance."

The accuracy of his "data-driven predictions" led Time magazine to name him as one of the most influential people of 2009.

He correctly forecast the result of the 2008 presidential election in 49 out of 50 US states and the winner of all 35 Senate races.

Silver shot to fame analysing baseball statistics -- known as sabermetrics -- to predict performance.

In 2004, he quit his job with KPMG and became a professional poker player, making a lucrative living from his winnings. While poker is partly a game of luck, Silver argues it is also about identifying the right signals.

"One of the key skills of poker is estimation," he said. "You have to make quick decisions on complex mathematical problems.

"There is not really a system you can use, but having a good intuition for winning odds and probabilities."

Silver has also turned his attention to terrorism, economics and climate change.

He said the September 11 terrorist attacks and the global financial crisis could have been avoided as "the signals were there", but predicting earthquakes and getting economic forecasts right had proved exceedingly difficult.

Silver argues that there is a scientific consensus that the planet is warming, but the impact of climate change cannot be precisely predicted.

"The greenhouse effect almost certainly exists," he writes in his bestselling book The Signal and the Noise.

"The impacts of this are uncertain, but are weighted toward the unfavourable outcomes."

To understand the forces under way in politics, society, economics and the climate, Silver argues that it "requires an attitudinal change" towards using and interpreting data to prepare for the things that, in hindsight, often seem to have been inevitable.